Italy Economy Profile 2013

Economy - overview

Italy has a diversified industrial economy, which is divided into a developed industrial north, dominated by private companies, and a less-developed, highly subsidized, agricultural south, with high unemployment. The Italian economy is driven in large part by the manufacture of high-quality consumer goods produced by small and medium-sized enterprises, many of them family owned. Italy also has a sizable underground economy, which by some estimates accounts for as much as 17% of GDP. These activities are most common within the agriculture, construction, and service sectors. Italy is the third-largest economy in the euro-zone, but its exceptionally high public debt and structural impediments to growth have rendered it vulnerable to scrutiny by financial markets. Public debt has increased steadily since 2007, topping 126% of GDP in 2012, and investor concerns about the broader euro-zone crisis at times have caused borrowing costs on sovereign government debt to rise to euro-era records. During the second half of 2011 the government passed a series of three austerity packages to balance its budget and decrease its public debt. These measures included a hike in the value-added tax, pension reforms, and cuts to public administration. The government also faces pressure from investors and European partners to sustain its recent efforts to address Italy's long-standing structural impediments to growth, such as an inflexible labor market and widespread tax evasion. In 2012 economic growth and labor market conditions deteriorated, with growth at -2.3% and unemployment rising to nearly 11%. Although the government has undertaken several economic reform iniatiatives, in the longer-term Italy's low fertility rate, productivity, and foreign investment will increasingly strain its economy. Italy's GDP is now 7% below its 2007 pre-crisis level.

GDP (purchasing power parity)

$1.834 trillion (2012 est.)
$1.877 trillion (2011 est.)
$1.869 trillion (2010 est.)
note: data are in 2012 US dollars

GDP (official exchange rate)

$1.98 trillion (2012 est.)

GDP - real growth rate

-2.3% (2012 est.)
0.4% (2011 est.)
1.8% (2010 est.)

GDP - per capita (PPP)

$30,100 (2012 est.)
$31,000 (2011 est.)
$31,000 (2010 est.)
note: data are in 2012 US dollars

GDP - composition by sector

agriculture: 2%
industry: 23.9%
services: 74.1% (2012 est.)

Population below poverty line

(2011)

Labor force

25.28 million (2012 est.)

Labor force - by occupation

agriculture: 3.9%
industry: 28.3%
services: 67.8% (2011)

Unemployment rate

10.9% (2012 est.)
8.4% (2011 est.)

Unemployment, youth ages 15-24

total: 25.4%
male: 23.3%
female: 28.7% (2009)

Household income or consumption by percentage share

lowest 10%: 2.3%
highest 10%: 26.8% (2000)

Distribution of family income - Gini index

31.9 (2011)
27.3 (1995)

Investment (gross fixed)

18.2% of GDP (2012 est.)

Budget

revenues: $956.6 billion
expenditures: $1.014 trillion (2012 est.)

Taxes and other revenues

48.3% of GDP (2012 est.)

Budget surplus (+) or deficit (-)

-2.9% of GDP (2012 est.)

Public debt

126.1% of GDP (2012 est.)
120.1% of GDP (2011 est.)
note: Italy reports its data on public debt according to guidelines set out in the Maastricht Treaty; general government gross debt is defined in the Maastricht Treaty as consolidated general government gross debt at nominal value, outstanding at the end of the year, in the following categories of government liabilities (as defined in ESA95): currency and deposits (AF.2), securities other than shares excluding financial derivatives (AF.3, excluding AF.34), and loans (AF.4); the general government sector comprises the central government, state government, local government and social security funds

Inflation rate (consumer prices)

3% (2012 est.)
2.9% (2011 est.)

Central bank discount rate

1.5% (31 December 2012)
1.75% (31 December 2010)
note: this is the European Central Bank's rate on the marginal lending facility, which offers overnight credit to banks in the euro area

Commercial bank prime lending rate

4.2% (31 December 2012 est.)
4.6% (31 December 2011 est.)

Stock of narrow money

$1.137 trillion (31 December 2012 est.)
$1.147 trillion (31 December 2011 est.)
note: see entry for the European Union for money supply in the euro area; the European Central Bank (ECB) controls monetary policy for the 17 members of the Economic and Monetary Union (EMU); individual members of the EMU do not control the quantity of money circulating within their own borders

Stock of broad money

$1.944 trillion (31 December 2012 est.)
$1.957 trillion (31 December 2011 est.)

Stock of domestic credit

$3.122 trillion (31 December 2012 est.)
$3.209 trillion (31 December 2011 est.)

Market value of publicly traded shares

$431.5 billion (31 December 2011)
$318.1 billion (31 December 2010)
$317.3 billion (31 December 2009)

Agriculture - products

fruits, vegetables, grapes, potatoes, sugar beets, soybeans, grain, olives; beef, dairy products; fish

Industries

tourism, machinery, iron and steel, chemicals, food processing, textiles, motor vehicles, clothing, footwear, ceramics

Industrial production growth rate

0.2% (2011 est.)

Current Account Balance

-$30.3 billion (2012 est.)
-$71.87 billion (2011 est.)

Exports

$483.3 billion (2012 est.)
$524.9 billion (2011 est.)

Exports - commodities

engineering products, textiles and clothing, production machinery, motor vehicles, transport equipment, chemicals; food, beverages and tobacco; minerals, and nonferrous metals

Exports - partners

Germany 13.3%, France 11.8%, US 5.9%, Spain 5.4%, Switzerland 5.4%, UK 4.7% (2011)

Imports

$469.7 billion (2012 est.)
$549.6 billion (2011 est.)

Imports - commodities

engineering products, chemicals, transport equipment, energy products, minerals and nonferrous metals, textiles and clothing; food, beverages, and tobacco

Imports - partners

Germany 16.5%, France 8.8%, China 7.7%, Netherlands 5.5%, Spain 4.7% (2011)

Reserves of foreign exchange and gold

$173.3 billion (31 December 2011 est.)
$158.9 billion (2010 est.)

Debt - external

$2.46 trillion (30 June 2012 est.)
$2.684 trillion (30 June 2011 est.)

Stock of direct foreign investment - at home

$369.5 billion (31 December 2012 est.)
$338.5 billion (31 December 2011 est.)

Stock of direct foreign investment - abroad

$537 billion (31 December 2012 est.)
$492.2 billion (31 December 2011 est.)

Exchange rates

euros (EUR) per US dollar -
0.7838 (2012 est.)
0.7185 (2011 est.)
0.755 (2010 est.)
0.7198 (2009 est.)
0.6827 (2008 est.)

Fiscal year

calendar year